Council members want income, smaller investments, business partners to remain private

A majority of Boulder City Council members say they do not believe the public should know how much money they make or what properties their business partnerships own, unless they own 51 percent or more of the partnership.

During a sometimes-contentious discussion of proposed financial disclosure rules, many council members said they wanted to preserve their financial privacy despite holding public office and that they would recuse themselves if any properties owned by their business interests were in front of the council or if projects in which their business partners were involved came before the city, despite not having to disclose those relationships.

Some council members came under criticism in 2012 for not disclosing all their investments. At the time, Councilman George Karakehian was a member of at least two limited liability corporations that own property in Boulder and were not listed on his financial disclosure form, one of them with developer Stephen Tebo. Karakehian said he did not list them because they are his retirement fund through Art Source International, the business he owns in downtown Boulder.

Boulder Mayor Matt Appelbaum said at the time that the way the disclosure rules were written, there was no way to know if Karakehian should have disclosed them. A majority of City Council members agreed the forms needed to be clarified.

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The special study session Thursday was intended to provide direction to City Attorney Tom Carr on how the forms and instructions should be revised. The council did not vote Thursday. Carr will present an ordinance to the council later this year.

The current disclosure form requires candidates and elected officials to disclose all sources of income above $1,000 but does not require them to list how much income. Carr suggested the City Council might want to use income ranges to give the public some sense of how much income officials get from each source.

However, many City Council members balked at that suggestion.

"You have to be careful about excluding people from running because they've been successful in their private lives," Karakehian said. "It could have a real impact on the pool of candidates."

Councilman Andrew Shoemaker said how much money people make is a sensitive issue.

"Transparency is in everyone's interest, but when we're talking about people's salaries, that's really sensitive, not only for the individual but for their employer," he said.

But Councilwoman Suzanne Jones said the public has an interest in ensuring a diversity of perspectives on the council, and knowing the income ranges of candidates and incumbents could help voters make decisions.

She also thought $1,200 earned from, say, a graphic design job that ended up in a pamphlet for a separate business doesn't create the same level of conflict as a $100,000 lobbying contract, and those distinctions should be evident in the disclosure form.

Councilwoman Mary Young said disclosing her income range would help dispel the idea that only rich people serve on the council.

A majority of council members said those who wish to disclose should go ahead and do so, but it should not be required.

In contrast to elected officials, the salaries of all city employees are public information.

A majority of council members also did not believe they should have to disclose the addresses of property owned by business interests unless they owned more than half the interest in the partnership.

"I'm not interested in people knowing every piece of property I own," Karakehian said. "If it comes up, then I disclose. I would still recuse myself, because that's what you do."

Appelbaum noted that there would be less transparency if property owned by LLCs isn't disclosed, though he also said assets are not the same as income.

"The problem is that a member of the public would say they have no way to track who might have a conflict, and that's why we do these disclosures," he said.

Councilman Macon Cowles suggested that officials should have to disclose the names of their partners in LLCs, to which Karakehian responded emphatically, "That's not going to happen."

Council members also said disclosing property owned by LLCs in which they had a small stake would be burdensome, as they wouldn't necessarily be aware of every deal.

Carr noted that there is a high level of distrust for government and the disclosures provide the public a way to check that council members are recusing themselves when they should be.

Jones said if an income source as small as $1,000 has to be disclosed, so should minor property interests.

"It doesn't make any sense to me that if you make $1,000 from a source, you have to disclose it, but if you have a 5 percent interest in an LLC that owns property, you don't," she said. "Because land use is what we do."

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